Which of the Following Statements About Fiscal Policy Is the Best

question 48

Multiple Choice

Which of the following statements about fiscal policy is the best description of "fine tuning"?

• A)The government continuously alters its spending and taxing plans to hold real GDP at potential.
• B)The government cuts taxes to remove a large and persistent recessionary gap.
• C)The government increases its spending to reduce an inflationary gap.
• D)The government decreases tax rates to decrease an inflationary gap.
• E)The government uses automatic stabilizers to reduce any output gaps.

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Definitions:

Premium Rate

The rate charged for an insurance policy, typically a periodic payment based on the level of coverage and risk factors.

Coinsurance Clause

A provision in an insurance policy that requires the insured to bear a portion of the costs of a claim, typically after the deductible has been met.

Premiums

Payments made regularly to an insurance company for coverage, often monthly or yearly.

Coinsurance Clause

A provision in an insurance policy that determines the percentage of the cost a policyholder is responsible for after the deductible is met.